Telecom tower REIT SBA Communications (NASDAQ:SBAC) was downgraded at BofA Securities, considering an expected elevation in tower churn post closing of the ~$23B AT&T (T) and EchoStar (SATS) deal.
AT&T announced yesterday an agreement to purchase certain wireless spectrum licenses from EchoStar.
The acquisition is set to add an average of ~50 MHz of low-band and mid-band spectrum to T’s holdings, covering virtually every market across the U.S. and positioning the company to maintain long-term leadership in advanced connectivity across 5G and fiber.
“As is customary with all carrier consolidation events (including spectrum acquisitions), we expect tower churn to be elevated in the near term post the closing of the transaction,” said a team of analysts, including Michael Funk, in a research note.
“SBAC is currently dealing with multi-year churn impacts from Sprint along with international churn within LatAm. We believe the potential for increased churn remains likely from this transaction (we increase churn by 25bps quarterly in 2H26+) and revise our estimates accordingly,” added the note.
BofA downgraded the stock to Neutral from Buy, and reduced the price objective to $230 from $260. SBAC was down 1.32% to $215.96 during Wednesday morning trade.
The rating aligns with Seeking Alpha’s Quant rating and the average SA authors’ rating of Hold. Meanwhile, the Wall Street analysts grade the stock as Buy.